Diverse shale oil explorer
Strata-X Energy Ltd.'s, (SXE) strategy centres on exploring and developing shale oil prospects in established hydrocarbon regions that present comparatively low exploration risk. Its portfolio involves four separate projects in two different countries. Recent drilling has revealed promising shale oil discoveries in each of the Illinois Basin and Texan Eagle Ford shale. Testing during the current quarter will be important for supporting further fund-raising.
US assets dominate near-term focus…
Strata-X’s cornerstone interests lie in shale oil plays in the US states of Illinois (Illinois Basin), Texas (Eagle Ford shale), North Dakota (Williston Basin) and California. Its current focus is on the Vail oil project in the southern Illinois Basin and its Maverick project in southern Texas. With Vail, the clean-out of an existing horizontal well that screened out during a multi-stage frack undertaken in November is scheduled for Q1CY14. With Maverick, a shallow (c 1,300m) vertical well drilled in Q4CY13 successfully recovered 600ft of Eagle Ford shale core. Strata-X plans to complete and stimulate the well late in Q1CY14. The Illinois and Eagle Ford basins are each deeply mature hydrocarbon provinces with an expansive network of existing pipeline and processing infrastructure that would make for very attractive development timings and economics.
With frontier Australian assets for the longer term
Complementing Strata-X’s nearer-term horizon US assets is an outright 100% stake in a large permit in the onshore Canning Basin in West Australia. The permit, which was awarded in March 2012, extends over 1.4m acres of what it considers to be a southern extension of the same Laurel and Goldwyer formations that yielded the discoveries logged by major regional player and acreage holder, Buru Energy. The acreage is prospective for both conventional and unconventional hydrocarbons and over the past couple of years has attracted a number of international players.
Financials
Outright equity positions across all its projects and a busy work programme make for a capital profile that must be managed. A successful March 2013 ASX IPO raised A$13m, which was followed by an over-subscribed A$6m placement at A$0.38/share in November. Cash on hand at the end of CY13 was US$8m, which on Strata-X’s recent period cash burn rate should see it’s work programme funded until Q4CY14.
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